US duties seen as boon to Mexico

A number of countries could see their solar manufacturing sectors benefit from the latest US round of preliminary duties on Chinese and Taiwanese PV kit, among them Mexico, Malaysia and Indonesia, says market researcher TrendForce.

The preliminary countervailing duties announced last week by the US government – expected to be followed next month by anti-dumping duties, and finalized this autumn – will have different effects on different segments of the supply chain, TrendForce notes.

Since 2012, when the US imposed its first round of duties on Chinese cells, Chinese PV manufacturers have bought cells from Taiwan and then exported modules to the US from mainland China. The new duties would shut off that “loophole”.

Some Chinese players will look to secure overseas OEM capacity – a strategy already championed by ReneSola.

But others may look for a more permanent solution in the form of overseas factories, and Mexico looks like the most likely choice, says Taiwan-based TrendForce.

Although not much of a player in PV, Mexico has grown into a global manufacturing hub, thanks to relatively low labour costs, low energy prices, and the North American Free Trade Agreement.

Taiwanese PV companies – which have largely focused on cells – are less likely to shift production overseas, since they tend to be smaller than their Chinese module-making customers, and less reliant on the US market.

Among cell makers, TrendForce sees Singapore-based REC Solar and Korea’s LG as potential beneficiaries of US trade barriers.

In terms of wafers and ingots, the researcher believes Chinese PV giants may shift work into Malaysia and Indonesia, in order to remain competitive in the US, should the duties be finalized.

Other module makers – and technologies – may also benefit from US duties, including CIGS players like Japan’s Solar Frontier, TrendForce says.

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